CHAPTER 7:

THE POST-DIGITAL RACE IS ON!

My favourite maths teacher used to say: "If you want to master addition, study integration". This is paramount to suggesting “if you want to master driving a car, learn to fly a plane”. At the time, while I believed I understood what he meant, only now do I see how profound his advice was...

Your Brain and its 500,000,000 Year History

The human brain, with its billions of neurons and glia cells, is the most complex system known in the universe. These cells shape every aspect of our shared humanity.  While the anatomy of the brain is difficult to understand, it becomes simpler and meaningful when we examine it in the light of its evolutionary past.

The best model for understanding the evolutionary structure of the brain is the triune brain theory. This theory, developed by neuroscientist Paul MacLean, gained influence in the middle of last century.

MacLean's  theory identifies three distinct brains that appeared successively during evolution: first the basal ganglia at the centre, followed by the limbic system, and finally the neocortex. These three structures are often referred to as  the reptile, mammal and sapiens brains. While it was once believed that these three brains operate independently, it is now understood that they are simultaneously active at all times.

Some animals have no brain at all; all of these live underwater. Jellyfish are one example: while they don't have a brain, they have a very basic set of nerves at the base of their tentacles. They live passively, drifting, depending entirely on their automatic reflexes for survival.  

For those of us with a brain, the first in the triune model is the reptilian brain, the oldest of the three. It controls our body's vital functions and oversees the basics: heart rate, temperature, hunger, mating, safety, fight-or-flight responses, etc. It is concerned with our survival and the reproductive success of our genes. It is our autopilot.

As animals became more complex and the first mammals emerged, other structures developed around the reptilian brain, which now make up the limbic system. This brain records memories (e.g. of behaviours that produced good or bad experiences) and produces feelings and emotions, to support functions such as learning and motivation. The third brain, the neocortex, appeared with the primates and  has culminated in our homo sapien refinement. The neocortex is visible from the outside of the human brain, and it has helped us develop complex social interactions and advanced planning, sophisticated language, abstract thinking, imagination and consciousness.

Functions enabled by evolving versions of the brain

Organisational Evolution and Corporate Nervous System

At this point, you may be wondering why I am talking about  pre-brain structures and the triune brain model. It’s because  it provides an exceptional analogy for the evolution of organisations, to clearly capture the challenges we need to face in their journey into the future.

Organisations have evolved by developing layers of sophistication around their nervous system, the essential layer for carrying information  to different parts of the organism, to make decisions, and to act in consequence.

In the same way that animals evolved their nervous systems through medusas, reptiles, mammals and primates, organisations have evolved from Industrial, to ICT-Enabled, Digital and now to Fluid (Post-Digital).

Each layer builds on  the previous one to enable more refined functions. As in the case of the brain, all organisational nervous layers are simultaneously active in all circumstances. And as with the brain, if the inner layers of an organisation don't work properly, the more sophisticated ones become irrelevant.

The Industrial Nervous System ( Elementary )

Before the  Industrial Revolution, work was an artisan activity, mostly carried out at home, and based on methodically developed craft abilities. The first organisational nervous systems started to develop in the late 18th and early 19th centuries, when factories started to emerge. The development of a standardised approach, time centred and precise,  modified the concept of work. Work gradually became more compartmentalised and hierarchical, paving the way for Fordism (named after Henry Ford). Fordism was a model of expansion based on mass production, using special machinery and unskilled, interchangeable labour (carbon based robots). As the medusa, some primitive set of nerves covered all the branches of the operation, but there was no sophisticated, real time, central brain.

The ICT Nervous System ( Efficiency )

The first sophisticated organisational brain appeared with Information and Communication Technology (ICT).  ICT capabilities have enabled organisations to process vast flows of information and transactions, support workgroup activities and executive decisions, and manage internal and external engagement and communication. As with the reptile brain, ICT also addresses a safety dimension (cyber-safety).

In its initial iteration, ICT was like a utility, running the basic information pipes across organisations. However, it quickly evolved to  amalgamate with all process improvement and change management initiatives.

Gartner, Inc., the global research and advisory firm, puts it well: "Technology and change management without process redesign equates to automated chaos and confusion. Technology and process redesign without change management equals alienation, turnover and underutilised systems. Change management and process redesign without technology results in frustration, inefficiency and a high cost of operation. Those three major domains need to be approached together."

Today, ICT is the indispensable operation, automation and efficiency improvement nervous system for every organisation.

The Digital Nervous System ( Engagement )

The Digital nervous system evolved around the ICT one to enable much more sophisticated functions. It’s  a common misperception that these two layers are only one. Understanding digital has required new thinking, and that new thinking didn’t come naturally.

The main challenge within this layer was to create digital blueprints, build big data backbones, establish agile service architectures and orchestrate powerful, complex digital ecosystems. In each endeavour, the absolute goal is to deliver premium experiences. Technology has evolved to a point where it enables us to move from electronic transactions to digital relationships. This new level of digital intimacy represents an immense competitive advantage, and has challenged organisations to pioneer new customer engagement strategies.

For the digital brain, disruption comes from changing the customer experience,  reinventing engagement processes with new technology capabilities. Quality of the experience, not operational efficiency, is the main goal of this layer. User Centred Design has therefore become the pillar discipline of this organisational brain.

By challenging delivery models and enhancing customer experiences, this layer has created competitive advantages and disrupted established business models, shaking all  foundations and forcing to reconsider business strategies.

This brain is strategic, agile, hyperaware, predictive and bold. More importantly, this brain is emotional, touching hearts and winning the mind of our customers.

The Fluid Nervous System ( Creativity)

Finally, the third brain, Post-Digital or Fluid, is emerging; the top layer, but always working simultaneously with ICT and Digital.

All the megatrends discussed so far on this blog are forcing the organisational evolution process to react: exponentiality, new globalisation, vanishing industry boundaries, network effect on business models, demand for frictionless experiences, hyper-personalisation, customer co-creation, changing style of communication, aging population, fast changing jobs, generational disruptions and human augmentation. All of these megatrends are converging, forming the perfect conditions for a new entity - a new brain - to emerge.

This change of business conditions is nothing like we have seen before; it requires an equally different response. This nervous system will help us to survive the 2020s. Beyond efficiency and beyond emotion, this is the age of potent creativity. The 2020s will be the era of a new breed of organisation, combining adaptive organisational design, supercharged culture, digital backbone, obsessive customer centricity and courageous leadership. The 2020s will be the era of the Fluid Organisation.

Functions enabled by evolving versions of the organisation

The Integration Parable

We are living in a time in which reptile, mammal and emerging primate organisations still have room to operate,  but things will change quickly. When sapiens organisations emerge, they will dominate, leaving only crumbs for the rest.

Evolving animals didn't have the opportunity to change their DNA to elevate their game, but organisations can - and must if they want to survive.   Organisational leaders must understand the challenges, risks and opportunities provided by a mutating business environment to avoid being swept away by evolutionary forces.

We need  to start pushing our organisations to evolve into sapiens . Many might say that it is premature, when many haven't yet learned to master the mammal layer. But they can’t evolve by concentrating on the mammal layer.

And this is where my old teacher's reflection come into play; only when walking the Fluid path, will we learn to master the digital layer and not before. Keep looking to the future to understand the past.

The Fourth Brain…?  

Since I have started the conversation with brains, I have  opened the door to connect with a topic I discussed in the previous post: augmented humans. At some point, the third carbon-based brain, the sapiens brain, will be enveloped by a silicon-based fourth brain, featuring extraordinary AI-based capabilities. This  will take we sapiens to the next level of evolution.

Will my analogy with organisational evolution match this step? Of course: beyond Fluid will be a stage where Artificial Intelligence will start to make central decisions for organisations and run substantial parts of the operation.

But that won't happen in the 2020's. It is a topic for another playbook ;-).

#PostDigitalIsOn
#BuildingTheThirdBrain
#AutomationEmotionImagination

#EfficiencyEngagementCreativity

#ConcentricLayers

Summary of Chapter 7

• Evolution of organisations mirrors the triune brain theory of the evolution of the human brain: the reptile brain, the mammal brain and the sapiens brain.
• ICT and Digital provide  the first two layers of modern organisations, their respective goals being  ‘efficiency’ and ‘engaging experiences’
• The third organisational layer, Fluid, will take organisations to a totally new capacity. Developing the Fluid layer will be essential for organisations to survive the challenges of the coming decade.